It sounds almost too good to be true: With the Beckham Law, you can now tax your income at a fraction of the usual tax burden – and that in one of the most attractive countries in Europe. Learn how you can take advantage of this special income tax regulation in Spain.
You can find more information about finance and taxes in Spain regularly in our magazine.
Content
- What is the Spanish Beckham Law?
- What Requirements Must Be Met?
- Application for the Beckham Law in Spain in 2024
- What About Spouses and the Tax Rate in Spain?
- How Long Do the Income Tax Rates Under the Beckham Law Apply?
- Your Path to an Attractive Tax Rate in Spain
What is the Spanish Beckham Law?
The Spanish Beckham Law, officially enacted in Spanish as “Régimen especial para trabajadores desplazados,” is a tax regulation that applies to both foreigners and Spaniards who have not been residents in Spain for more than five years.
The Spanish Beckham Law, officially enacted in Spanish as “Régimen especial para trabajadores desplazados,” is a tax regulation that applies to both foreigners and Spaniards who have not been residents in Spain for more than five years. Spain imposes progressive income tax rates starting from an annual income of 60,000 euros, which can reach up to 47%
Tax Rate in Spain and Scope of Application
Under the Beckham Law, EU citizens who move to Spain can tax their employment income up to a maximum amount of 600,000 Euro at only 24%. For income above 600,000 Euro, an increased tax rate of 47% applies in Spain. The law allows beneficiaries to tax their worldwide income at a reduced rate, even if this income is earned outside of Spain.
Compared to the regular tax rates in Spain and other countries, the Beckham Law offers clear tax savings. A significant advantage of the Beckham Law is that beneficiaries are exempt from the obligation to file a tax return abroad during its validity period.
This regulation makes Spain an attractive alternative, especially for entrepreneurs and high-income individuals looking to relocate their base to the country.
What Requirements Must Be Met?
To take advantage of the Beckham Law, applicants must meet certain criteria. One key criterion is that the applicant must have resided outside of Spain for the last five years before relocation. This condition is in place because the law is explicitly designed to attract highly qualified foreign workers.
Additionally, one of the following conditions must be met:
1. Employment with a Spanish Employer:
The applicant must enter into a regular employment contract with a company in Spain. The work must be performed from Spain, and the salary must be at least the Spanish minimum wage of approximately 1,200 Euro per month.
2. Assignment/Online Work for a Foreign Employer:
The applicant has been assigned to Spain by a foreign employer or has a remote work arrangement. In this case, the work must be performed exclusively online from Spain. It is important that no permanent establishment of the foreign employer is created in Spain to maintain the status. The law does not apply to freelancers who have multiple foreign clients.
3. Director of a Spanish Company:
Applicants who serve as directors of a Spanish company can also benefit from the Beckham Law. If the company only manages assets, the applicant’s stake must not exceed 24%. However, if it is an operational company, the director can hold a stake of over 25%.
4. Self-Employment with an Innovative Character:
Self-employed individuals engaged in an innovative activity of particular economic interest to Spain can also use the Beckham Law. In such cases, the activity must be certified by ENISA (Empresa Nacional de Innovación).
5. Highly Qualified Professionals:
Highly qualified professionals working in start-up companies, offering training, or engaged in research can also benefit from the special tax regulation. In these cases, certification by ENISA is also necessary.
6. Restrictions on Income from Spanish companies:
Applicants must not derive their income from a permanent establishment in Spain, unless this company operates completely independently. This restriction ensures that the law is primarily used to attract foreign professionals rather than for tax avoidance.
Criteria for Spanish Companies
Spanish companies that employ workers under the Beckham Law must also meet certain criteria.
The company should have been in existence for at least one to two years, and its business purpose as well as actual operational activities should go beyond mere asset management. Additionally, the company must employ at least one full-time employee, which can also be the director himself.
Application for the Beckham Law in Spain in 2024
Anyone wishing to benefit from the low income tax in Spain and apply will find all the important steps outlined here:
1. Meet Requirements:
Before applying, one of the professional conditions mentioned above must be fulfilled.
The next concrete step is moving to Spain. An official residential address and a Spanish tax number (NIE) are required.
2. Application for the Reduced Income Tax in Spain:
The application deadline for the reduced tax rate in Spain is six months. It starts from the day you begin working in Spain or start your business activity. This deadline is strict and cannot be extended.
The application for the Beckham Law must be submitted in writing to the Spanish Tax Authority (Agencia Tributaria). The following documents and evidence are required:
- Proof of moving to Spain (e.g., rental contract or purchase agreement for a property)
- Employment contract or confirmation of business activity
- Certification from ENISA, if applicable
- Proof of tax number (NIE)
- Identification documents and possibly other official forms
What About Spouses and the Tax Rate in Spain?
Since 2023, the Beckham Law in Spain has offered attractive tax benefits not only for the main applicant but also for their family members.
Requirements for the Co-Registration of Family Members:
1. Joint Relocation: Family members must either move to Spain at the same time as the main applicant or within the first tax year.
2. Primary Residence in Spain: The family’s primary tax residence must be moved to Spain.
3. Non-Residency: Family members must not have been residents in Spain in the last five years before the move.
4. Income Without Permanent Establishment: The income of family members must not come from a permanent establishment located in Spain.
5. Lower Income: The income of family members must be lower than that of the main applicant.
If these requirements are met, family members will benefit from the same low tax rate in Spain as the main applicant.
How Long Do the Income Tax Rates Under the Beckham Law Apply?
Beneficiaries enjoy the attractive tax rate in Spain for a period of six years. The period begins with the tax year in which the applicant moves their tax residence to Spain.
Your Path to an Attractive Tax Rate in Spain
The Beckham Law offers entrepreneurs and executives unique opportunities for tax optimization in a high-quality living environment.
Our tax experts at Global Tax Saving have years of experience with Spanish tax law and can help you avoid complications and fully exploit the benefits.
Contact us today for professional advice.
